Cryptocurrency Exit Strategy

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ny_rn
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Cryptocurrency Exit Strategy

Post by ny_rn » Thu Jan 04, 2018 10:34 am

I do not intend for this post to turn into a "should I speculate with cryptocurrency" thread. We all understand it is highly speculative/volatile and could drop to $0 at any point. With that said, I purchased Ripple (XRP) early December 2017. Today it is trading ~ $3.50. I plan to hold XRP until it "hopefully" produces a significant amount of money.

What would be a good exit strategy? How would you go about constructing one? Any ideas would be helpful. I guess if it goes to $0, then my exit strategy would be a given. :oops:

Valuethinker
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Re: Cryptocurrency Exit Strategy

Post by Valuethinker » Thu Jan 04, 2018 10:40 am

ny_rn wrote:
Thu Jan 04, 2018 10:34 am
I do not intend for this post to turn into a "should I speculate with cryptocurrency" thread. We all understand it is highly speculative/volatile and could drop to $0 at any point. With that said, I purchased Ripple (XRP) early December 2017. Today it is trading ~ $3.50. I plan to hold XRP until it "hopefully" produces a significant amount of money.

What would be a good exit strategy? How would you go about constructing one? Any ideas would be helpful. I guess if it goes to $0, then my exit strategy would be a given. :oops:
From my dot com days, remember to take some profits off the table. It's not actual money until you have done that.

You could say "sell half when I have 2xed my money" for example.

Also a realization strategy that allows you to claim capital losses (if there are any) would be good, too.

barnaclebob
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Re: Cryptocurrency Exit Strategy

Post by barnaclebob » Thu Jan 04, 2018 10:47 am

First of all sell before it ever gets to zero because it may be more difficult to write it off as a capital loss if its valued at .0000001 but there is no bid because in the IRS eyes its still not worthless yet.

Second sell at the peak.

ny_rn
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Re: Cryptocurrency Exit Strategy

Post by ny_rn » Thu Jan 04, 2018 11:14 am

Valuethinker wrote:
Thu Jan 04, 2018 10:40 am
ny_rn wrote:
Thu Jan 04, 2018 10:34 am
From my dot com days, remember to take some profits off the table. It's not actual money until you have done that.
Great point.

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nisiprius
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Re: Cryptocurrency Exit Strategy

Post by nisiprius » Thu Jan 04, 2018 11:18 am

Of course, I happen to be a cryptocurrency skeptic. My feeling is that these cryptocurrency "markets" have about the adulthood of the Curb Exchange in the early 1900s. That is, you do not have stuff like "specialists" making a market and insuring orderly trading; you don't have an SEC; and so forth. Curb Exchange prices were published by the Commercial and Financial Chronicle "It should be understood that no such reliability attaches to transactions on the 'Curb' as to those on the regularly organized stock exchanges... it is out of the question for anyone to vouch for the absolute trustworthiness of the record of 'Curb' transactions, and we give it for what it may be worth."

I would not have any confidence at all that you can freely sell at an instant of your choosing, and actually get anything resembling the posted "market value." This is particularly true if you think it is a "good time to sell," because lots of other people will be thinking the same thing at the same time. The small group of people who own most of the bitcoin, and probably most of the cryptocurrency of any kind, may not feel like paying you the number you see on the screen. And there may be a modern-day equivalent of "the ticker falling two hours behind." And is any cryptocurrency transaction ever really fully "confirmed?"

So, part of my exit strategy would involve, let's call it "rebalancing" to make it sound virtuous: constantly and progressively selling, gradually, to insure that you get at least some profits while they are easily gettable. Again, in my personal opinion, wanting to sell at the very tippy top is a form of greed, and as the saying goes "Bulls make money and bears make money, but pigs get slaughtered."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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rmelvey
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Re: Cryptocurrency Exit Strategy

Post by rmelvey » Thu Jan 04, 2018 11:27 am

I would try to figure out what % of your portfolio is too much to have in XRP (or crypto) and if it appreciates a lot and breaches that level then you sell down to get it back under target. That is the most unemotional way to handle it. Basically treat it similar to rebalancing any other asset in your portfolio. The next thing to think about is whether or not you want to keep rebalancing into the XRP/crypto if it drops below your target weighting. That might be harder to stomach.

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Re: Cryptocurrency Exit Strategy

Post by BogleMelon » Thu Jan 04, 2018 11:41 am

Something to consider, if you lose, you should calculate your loss based on the highest value you reached one day, not based on the initial investment amount. Going from this point, you should be able to develop a custom strategy that fit your own taste
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

bberris
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Re: Cryptocurrency Exit Strategy

Post by bberris » Thu Jan 04, 2018 1:19 pm

barnaclebob wrote:
Thu Jan 04, 2018 10:47 am
First of all sell before it ever gets to zero because it may be more difficult to write it off as a capital loss if its valued at .0000001 but there is no bid because in the IRS eyes its still not worthless yet.

Second sell at the peak.
To avoid the "First of all..." problem, only buy cryptos that go up. Also, heartily agree that the best place to sell is at the top.

Nate79
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Re: Cryptocurrency Exit Strategy

Post by Nate79 » Thu Jan 04, 2018 1:44 pm

You have two options. 1) Set a strategy now and follow it exactly. 2) Make active decisions along the way. I suggest #1. Basically no different than having an Investment Policy Statement (IPS):
https://www.bogleheads.org/wiki/Investm ... _statement

jhehl
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Re: Cryptocurrency Exit Strategy

Post by jhehl » Thu Jan 04, 2018 2:34 pm

Personally I would take most money off the table in regards to Ripple. You got extremely lucky and I wouldn't be greedy and hope that it goes up THAT much more. I've yet to meet anybody that has deep knowledge of the crypto world and isn't shaking their heads and what's going on with Ripple right now. Not sure if you read much about it recently, but I would do so and then see. For example this:

https://www.coindesk.com/ripples-xrp-gi ... cond-look/

https://twitter.com/novogratz/status/948901960132038656

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celia
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Re: Cryptocurrency Exit Strategy

Post by celia » Thu Jan 04, 2018 2:43 pm

Valuethinker wrote:
Thu Jan 04, 2018 10:40 am
You could say "sell half when I have 2xed my money" for example.
I prefer something more like "sell 1/5 when I have 5xed my money".

Then repeat if it goes up 10 and 20 times your original cost.

This assumes this is what you hope will happen. :wink: :wink:

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Re: Cryptocurrency Exit Strategy

Post by Tigermoose » Thu Jan 04, 2018 2:46 pm

I would check the calendar and see if the day ends in a Y. If so, I would sell my cryptocurrency "assets".
Institutions matter

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ohboy!
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Re: Cryptocurrency Exit Strategy

Post by ohboy! » Thu Jan 04, 2018 3:06 pm

Hope you got out of some of it at $3.50. Like others have said, take your initial investment off the table, and take some profit to cover short term capital gains. Ripple is way overvalued at this point. It likely already priced in any potential pump from being added to Coinbase. You can see lots of people are taking profits now. It would be a good idea to diversify you Ripple holdings into other cryptos, if you haven't already.

jhehl
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Re: Cryptocurrency Exit Strategy

Post by jhehl » Thu Jan 04, 2018 3:06 pm

celia wrote:
Thu Jan 04, 2018 2:43 pm

Then repeat if it goes up 10 and 20 times your original cost.

This assumes this is what you hope will happen. :wink: :wink:
It already went up more than 10x since early December.

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David Jay
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Re: Cryptocurrency Exit Strategy

Post by David Jay » Thu Jan 04, 2018 3:22 pm

I say take half every time it goes up 10x. You didn't tell us what you paid, so let me suggest $0.35 just for illustration:
Take out half now.
Take out half when it hits $35
Take out half when it hits $350
rinse and repeat indefinitely.

After each sale your investment will still be 500% of what you had at the start of the cycle. After each cycle you will have cashed out 500% of what you had invested the start of each cycle.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

a5ehren
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Re: Cryptocurrency Exit Strategy

Post by a5ehren » Thu Jan 04, 2018 3:22 pm

Sell it all right now and hope your exchange of choice doesn't disappear into the night before you are able to get your money out.

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DaftInvestor
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Re: Cryptocurrency Exit Strategy

Post by DaftInvestor » Thu Jan 04, 2018 3:24 pm

My Exit Strategy would be to Exit. Take the money out of Cryptocurrency and invest it.

harvestbook
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Re: Cryptocurrency Exit Strategy

Post by harvestbook » Thu Jan 04, 2018 4:02 pm

I've been fascinated by the BTC median volume of transactions chart and how it correlates to the selloffs. It looks like whales start cashing out and milking the sardines who then buy back in at short-term lows "because it's a bargain." Rinse and repeat. I suspect ALL of the crypto markets are being milked in the same way, by a small cabal of dozens or a few hundred people.

(I bought a little on Coinbase just to learn but watching the shenanigans, the pump-and-dumps via CNBC, and Coinbase "conveniently" shutting down whenever there's a crash made me already sell half of what I had at a slight loss and a sigh of relief. Just hodling a little bit to stay interested but it's pocket change.)

http://bitinfocharts.com/comparison/bit ... ue.html#3m

In short, if I had double gains, I'd be 90 percent out of there. Ripple can't go to $350 because then its market cap would exceed the entire worth of the world.
I'm not smart enough to know, and I can't afford to guess.

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ohboy!
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Re: Cryptocurrency Exit Strategy

Post by ohboy! » Thu Jan 04, 2018 4:09 pm

harvestbook- Use gdax, not coinbase. Same login. No fees if you use limit orders and way lower fees with market orders. Free transfers between the two exchanges as well.

ny_rn
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Re: Cryptocurrency Exit Strategy

Post by ny_rn » Thu Jan 04, 2018 5:46 pm

ohboy! wrote:
Thu Jan 04, 2018 3:06 pm
Hope you got out of some of it at $3.50. Like others have said, take your initial investment off the table, and take some profit to cover short term capital gains. Ripple is way overvalued at this point. It likely already priced in any potential pump from being added to Coinbase. You can see lots of people are taking profits now. It would be a good idea to diversify you Ripple holdings into other cryptos, if you haven't already.
This is what I'm actually waiting on. It's not currently on Coinbase but if it gets added I'll definitely take profits from all of the FOMO.

ny_rn
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Re: Cryptocurrency Exit Strategy

Post by ny_rn » Thu Jan 04, 2018 5:46 pm

ohboy! wrote:
Thu Jan 04, 2018 4:09 pm
harvestbook- Use gdax, not coinbase. Same login. No fees if you use limit orders and way lower fees with market orders. Free transfers between the two exchanges as well.
This is exactly what I do.

patrick
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Re: Cryptocurrency Exit Strategy

Post by patrick » Thu Jan 04, 2018 7:45 pm

Right now it looks like XRP is trading at $2.79 in the USA and $4.04 in South Korea. Perhaps the best exit strategy involves moving to Korea?

crit
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Re: Cryptocurrency Exit Strategy

Post by crit » Thu Jan 04, 2018 8:18 pm

Sell. Sell now.

We own some crypto that we got early last summer, and cannot get out because all of the exchanges are backed up indefinitely in processing new users. Or that's the story I am told. I frankly don't buy it. I think it's all fictional, the whole thing. I don't think anyone is trading anything for dollars, these are purely made-up "prices".

That's the only way I can deal with being a paper two-comma and knowing I will never see a dime of it because at every supposed step of the imaginary process there is just some little reason it .... doesn't exist.

riverguy
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Re: Cryptocurrency Exit Strategy

Post by riverguy » Thu Jan 04, 2018 11:36 pm

crit wrote:
Thu Jan 04, 2018 8:18 pm
I don't think anyone is trading anything for dollars, these are purely made-up "prices".
Huh???



OP, you need to look at the coins outstanding to really see what a reasonable price target is. The reason BTC is so high is due to the low amount of coins outstanding and a small float. BTC has 17M coins outstanding with a total possible of 21M. XRP has 39B coins right now with a max of 100B.

You are in a pretty good spot. You bought early December around $0.25. Currently sitting around $3. Sell 1/6 of your position. That gets you your money back and a double. Then figure out where you want to go from there. Can't get hurt then.

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cfs
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Re: Cryptocurrency Exit Strategy

Post by cfs » Thu Jan 04, 2018 11:41 pm

I don't have an exit strategy (because I don't have an entry strategy). Good luck and thanks for reading ~cfs~
~ Your Money, Your Portfolio, Your Decision ~

riverguy
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Re: Cryptocurrency Exit Strategy

Post by riverguy » Fri Jan 05, 2018 12:06 am

cfs wrote:
Thu Jan 04, 2018 11:41 pm
I don't have an exit strategy (because I don't have an entry strategy). Good luck and thanks for reading ~cfs~
And that's why this dude is sitting on a 12x gain in a month and you aren't.

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cfs
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Re: Cryptocurrency Exit Strategy

Post by cfs » Fri Jan 05, 2018 12:11 am

riverguy wrote:
Fri Jan 05, 2018 12:06 am
cfs wrote:
Thu Jan 04, 2018 11:41 pm
I don't have an exit strategy (because I don't have an entry strategy). Good luck and thanks for reading ~cfs~
And that's why this dude is sitting on a 12x gain in a month and you aren't.
Good luck, and thanks for reading ~cfs~
~ Your Money, Your Portfolio, Your Decision ~

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Ditchwitch
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Re: Cryptocurrency Exit Strategy

Post by Ditchwitch » Fri Jan 05, 2018 1:08 am

I have been trying to buy some XRP for a week or so now. I have 4 accounts with Coinbase, Kraken, Bitstamp and Binance (Chinese exchange). Still own an Iota - pun intended - of crypto b/c all the exchanges are backed up verifying accounts. I can't imagine how any future exit strategy would work if my entry is such a screw up :shock:
Probably a good thing it's going this way... :D
“Anyone who has never made a mistake has never tried anything new.” | ― Albert Einstein

hilink73
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Re: Cryptocurrency Exit Strategy

Post by hilink73 » Fri Jan 05, 2018 1:21 am

nisiprius wrote:
Thu Jan 04, 2018 11:18 am
Of course, I happen to be a cryptocurrency skeptic. My feeling is that these cryptocurrency "markets" have about the adulthood of the Curb Exchange in the early 1900s. That is, you do not have stuff like "specialists" making a market and insuring orderly trading; you don't have an SEC; and so forth. Curb Exchange prices were published by the Commercial and Financial Chronicle "It should be understood that no such reliability attaches to transactions on the 'Curb' as to those on the regularly organized stock exchanges... it is out of the question for anyone to vouch for the absolute trustworthiness of the record of 'Curb' transactions, and we give it for what it may be worth."

I would not have any confidence at all that you can freely sell at an instant of your choosing, and actually get anything resembling the posted "market value." This is particularly true if you think it is a "good time to sell," because lots of other people will be thinking the same thing at the same time. The small group of people who own most of the bitcoin, and probably most of the cryptocurrency of any kind, may not feel like paying you the number you see on the screen. And there may be a modern-day equivalent of "the ticker falling two hours behind." And is any cryptocurrency transaction ever really fully "confirmed?"
Re selling all freely: at the moment, there seems to be no problems with the major exchanges but there are many sketchy ones, too.
Normally, I've received my money using SEPA (European bank transfer) without one to a few days.
But this is not guaranteed. On the other hand the market is big enough that people would abandon an exchange if too many

Also, liquidity could be a problem at certain times on certain exchanges.
Just an example for different trading volumes for the ETH/USD pair on Jan 2nd:
Kraken: 45'700 ETH (which is still ok)
GDAX: 396'400 ETH

So, yes, some valid points.
nisiprius wrote:
Thu Jan 04, 2018 11:18 am
So, part of my exit strategy would involve, let's call it "rebalancing" to make it sound virtuous: constantly and progressively selling, gradually, to insure that you get at least some profits while they are easily gettable. Again, in my personal opinion, wanting to sell at the very tippy top is a form of greed, and as the saying goes "Bulls make money and bears make money, but pigs get slaughtered."
That is a great balanced answer from a "sceptic". :wink:

I've also managed to get my initial investment out, so everything for me is a net gain.

My "exit" strategy:
I've set a certain number of what I want to achieve and will cash out a part of my holdings accordingly.

Taking (some) profit is not a bad idea.

hilink73
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Re: Cryptocurrency Exit Strategy

Post by hilink73 » Fri Jan 05, 2018 1:35 am

jhehl wrote:
Thu Jan 04, 2018 2:34 pm
Personally I would take most money off the table in regards to Ripple. You got extremely lucky
Seconded.

hilink73
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Re: Cryptocurrency Exit Strategy

Post by hilink73 » Fri Jan 05, 2018 1:39 am

ny_rn wrote:
Thu Jan 04, 2018 5:46 pm


This is what I'm actually waiting on. It's not currently on Coinbase but if it gets added I'll definitely take profits from all of the FOMO.
Then you can wait very long and your current gains will be gone. Probably.
They won't be adding XRP. (Or maybe I mssed something.)
I wouldn't wait for that.

hilink73
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Re: Cryptocurrency Exit Strategy

Post by hilink73 » Fri Jan 05, 2018 1:42 am

crit wrote:
Thu Jan 04, 2018 8:18 pm
Sell. Sell now.

We own some crypto that we got early last summer, and cannot get out because all of the exchanges are backed up indefinitely in processing new users. Or that's the story I am told. I frankly don't buy it. I think it's all fictional, the whole thing. I don't think anyone is trading anything for dollars, these are purely made-up "prices".

That's the only way I can deal with being a paper two-comma and knowing I will never see a dime of it because at every supposed step of the imaginary process there is just some little reason it .... doesn't exist.
Slow down.

If you got some cryptocurrencies, you have bought them somewhere, right?
So you should be able to sell them there as well.

And yes: with some exchanges it could take weeks until you a verified in their KYC process due to backlog.
But cashing out once you have an account should be no problem.

Where did you buy and where do you want to sell now?

hilink73
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Re: Cryptocurrency Exit Strategy

Post by hilink73 » Fri Jan 05, 2018 1:44 am

Tigermoose wrote:
Thu Jan 04, 2018 2:46 pm
I would check the calendar and see if the day ends in a Y. If so, I would sell my cryptocurrency "assets".
Veeeery helpful.

Finridge
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Re: Cryptocurrency Exit Strategy

Post by Finridge » Fri Jan 05, 2018 3:33 am

crit wrote:
Thu Jan 04, 2018 8:18 pm
Sell. Sell now.

We own some crypto that we got early last summer, and cannot get out because all of the exchanges are backed up indefinitely in processing new users. Or that's the story I am told. I frankly don't buy it. I think it's all fictional, the whole thing. I don't think anyone is trading anything for dollars, these are purely made-up "prices".

That's the only way I can deal with being a paper two-comma and knowing I will never see a dime of it because at every supposed step of the imaginary process there is just some little reason it .... doesn't exist.
Whoa! You're saying that you have a two-comma portfolio of crypto, and aren't able to convert it to cash!?

If the exchanges are only allowing cash in and not out, that would explain a lot.

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Re: Cryptocurrency Exit Strategy

Post by nisiprius » Fri Jan 05, 2018 7:05 am

patrick wrote:
Thu Jan 04, 2018 7:45 pm
...Right now it looks like XRP is trading at $2.79 in the USA and $4.04 in South Korea...
How is this even possible? Why are the arbitrageurs falling down on the job? What kind of "market" is this?
Perhaps the best exit strategy involves moving to Korea?
Because XRP weighs so much and takes so long to ship? Come on, this stuff is supposed to be electronic.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Cryptocurrency Exit Strategy

Post by nisiprius » Fri Jan 05, 2018 7:12 am

Seriously: has anybody bought anything physical or tangible using Ripple?

A few weeks ago a crypto enthusiast was talking about all the merchants that accept Bitcoin, and mentioned Subway (the sandwich franchise). That sounded interesting to me, but I couldn't find out anything about it on their website, and even when you order on the Internet it's not shown as a payment option. I did a little poking around and found two stories from 2014, one of which just said there was one "in Moscow," and of which named one specific franchise in Allentown, Pennsylvania... and a recent story that mentioned that one in Buenos Aires had announced that they would accept it. In other words... three out of 45,000. That's Bitcoin.

How about Ripple?

Anyone want to point me to a checkout web page from an online merchant that offers to accept Ripple?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Cryptocurrency Exit Strategy

Post by ccf » Fri Jan 05, 2018 7:56 am

ny_rn wrote:
Thu Jan 04, 2018 10:34 am
What would be a good exit strategy? How would you go about constructing one?
I play with some "funny money" (including crypto) and I add my plan/strategy to each to my IPS when I make the investment/gamble. Here's what I currently have, if it is any help:

thing 1, an individual stock: "If my holdings exceed $X, sell off $Y and put it in the total market". (no plan for it dropping, just hold)

thing 2, private investment: "Sell off all but $X if I can realize at least $Y in profit" (no plan for the remainder unless that happens)

thing 3, a collection of cryptos, after selling the majority during the big run up we've been having, what remains has large gains: "Prefer to hold these for at least 1 year to avoid LTCG. If account exceeds $X before the end of the year, take some gains. No further trades unless I hit that number or Coinbase adds a coin that I hold and runs up the price" (no action if it drops, it can go to zero)
Last edited by ccf on Fri Jan 05, 2018 8:35 am, edited 1 time in total.

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Re: Cryptocurrency Exit Strategy

Post by ccf » Fri Jan 05, 2018 8:21 am

nisiprius wrote:
Fri Jan 05, 2018 7:12 am
Anyone want to point me to a checkout web page from an online merchant that offers to accept Ripple?

XRP isn't for buying things.

Ripple's product is used by banks, American Express, etc. I don't follow Ripple but I haven't heard of anyone using XRP, Ripple's currency, for real things at the moment. Here is what Ripple hopes will happen with their currency, according to David Schwartz (Twitter bio: "Chief Cryptographer at Ripple; one of the original architects of the XRP network")

https://www.xrpchat.com/topic/4029-expl ... ment-39074

Not a defense of Ripple, the current market cap of Ripple's XRP (125 billion) seems ridiculous to me and the founders/executives hold billions of this currency that they created....

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Re: Cryptocurrency Exit Strategy

Post by ny_rn » Fri Jan 05, 2018 9:30 am

crit wrote:
Thu Jan 04, 2018 8:18 pm
Sell. Sell now.

We own some crypto that we got early last summer, and cannot get out because all of the exchanges are backed up indefinitely in processing new users. Or that's the story I am told. I frankly don't buy it. I think it's all fictional, the whole thing. I don't think anyone is trading anything for dollars, these are purely made-up "prices".

That's the only way I can deal with being a paper two-comma and knowing I will never see a dime of it because at every supposed step of the imaginary process there is just some little reason it .... doesn't exist.
Where did you buy them? I have had no problem selling in the past.

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Re: Cryptocurrency Exit Strategy

Post by ny_rn » Fri Jan 05, 2018 9:39 am

Thank you all for the responses. I will start by taking 2x my money out and leave the rest.

It will be interesting to see how this new fund by Arrington XRP Capital plays out: http://arringtonxrpcapital.com/blog/

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HomerJ
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Re: Cryptocurrency Exit Strategy

Post by HomerJ » Fri Jan 05, 2018 9:39 am

riverguy wrote:
Fri Jan 05, 2018 12:06 am
cfs wrote:
Thu Jan 04, 2018 11:41 pm
I don't have an exit strategy (because I don't have an entry strategy). Good luck and thanks for reading ~cfs~
And that's why this dude is sitting on a 12x gain in a month and you aren't.
I had a friend bet his last $50 on red 18. He won, and was sitting on a 35x gain in about 60 seconds (he actually GOT his money though instead of sitting there with a paper gain).

It was still an dumb bet.

To his credit, he didn't let it ride. If you get lucky enough to make 35x in 60 seconds, or 12x in a month, you need to be smart enough to take SOME of that off the table.
Last edited by HomerJ on Fri Jan 05, 2018 10:22 am, edited 1 time in total.

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queso
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Re: Cryptocurrency Exit Strategy

Post by queso » Fri Jan 05, 2018 9:53 am

Wish I could help, but I can't bring myself to exit or formulate much of an exit strategy either. Part of the problem is I have grown to enjoy it. Fiddling around with Coinbase got old fast but once you start playing with GDAX and the other exchanges, hardware wallets, etc. it's easy to geek out and start buying stuff just because you think it's ridiculously funny (DOGE) or challenging to do (having to move from a hardware wallet, convert to several different coins and move across a couple of exchanges to get something). I didn't own XRP when I started playing with crypto, but have since added it and don't plan on selling it anytime soon. Like a lot of people, I was heavy BTC so when BTC was at what I figured was a decent level I pulled my own money off the table. Since I am now playing with house money my strategy has gotten a little more loose and I have diversified out of the top few coins into some of the smaller ones that still have a large market cap (TRX, etc.). I am still weighted most heavily toward ETH, LTC and BTC and last time I checked was up about 20x across the "portfolio". On the subject of bailing, I am in the camp that doesn't think it will be that easy. Assuming you have a considerable amount of crypto you are probably keeping it in a hardware wallet or similar. Ever tried to sell something fast from a hardware wallet? Maybe I am doing it wrong, but usually when I want to do that it takes a lot longer than I think it ought to depending on the currency/exchange. During times of high volume when FOMO is peaking half the time the exchange websites are locking up or going offline every few minutes. For that reason, plus the fact that we all know it is literally impossible to call the top, I think you have to pick an arbitrary level and make that your exit point. Your exit point can't be when the twittersphere explodes that XYZ cryptocurrency is tanking because that will be the exact time that all the lemmings run to the exchanges and try to dump it and the exchange website will go offline and the network will be taking forever to process transactions. I tend to think some of the other posters' ideas were good ones. I will likely adopt something like "when currency x gets to y level I will take z% of my holdings out and either move them into VTSAX, augment other crypto positions or buy new currencies".

ny_rn
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Re: Cryptocurrency Exit Strategy

Post by ny_rn » Fri Jan 05, 2018 10:33 am

queso wrote:
Fri Jan 05, 2018 9:53 am
I tend to think some of the other posters' ideas were good ones. I will likely adopt something like "when currency x gets to y level I will take z% of my holdings out and either move them into VTSAX, augment other crypto positions or buy new currencies".
I have moved all of my past crypto gains into Vanguard Total US Stock as well.

hilink73
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Re: Cryptocurrency Exit Strategy

Post by hilink73 » Fri Jan 05, 2018 11:24 am

ccf wrote:
Fri Jan 05, 2018 8:21 am
nisiprius wrote:
Fri Jan 05, 2018 7:12 am
Anyone want to point me to a checkout web page from an online merchant that offers to accept Ripple?
and the founders/executives hold billions of this currency that they created....

Exactly. This is a complete rip off.

Additionally, this "product" has nothing to do with decentralization, or anything what blockchain stands for.
Yet, people buy this crap.

fatlever
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Re: Cryptocurrency Exit Strategy

Post by fatlever » Fri Jan 05, 2018 12:31 pm

I would not fully exit.

Fearing a crypto bear market, I took 50% out (pretty much all profits, DCA and no more real money invested since June), paid a big chunk of the mortgage and put it into VT Taxable.

I felt even more comfortable taking a bigger gamble and put a few thousand into RaiBlocks (think Bitcoin but fast, without fees, without miners). In a few weeks that turned into almost $100K.

I wouldn't fully exit until sentiment turns against cryptos. Right now the pro-crypto sentiment is higher than ever and if 2018 is anything like 2017 then you're missing out. I do agree that all signs of a speculative bubble are now there. Tons of new people throwing their money at Ripple thinking a sub $1 coin might be $10K like Bitcoin or tons of Asians pouring their money into Tron which along with a few other top cryptos seem like pure vaporware with billions in marketcap.
Last edited by fatlever on Fri Jan 05, 2018 2:30 pm, edited 2 times in total.

mws13
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Re: Cryptocurrency Exit Strategy

Post by mws13 » Fri Jan 05, 2018 1:06 pm

There is no exit strategy for me.

I now look at our portfolio as:
  • Vanguard (Domestic vs Foreign, Stocks vs Bonds)
  • Real Estate
  • Crypto Assets
For me it is an asset class. It took me a long time to get to that point, and if I listed my percentage of Crypto, it would make most people here crazy. :D

I thought that Ripple was too highly valued, so I never bought any. The fact that Coinbase said no to Ripple, indirectly, I would diversify your Crypto portfolio with 3-4 holdings rather than one.

There really is not much "bought Bitcoin" these days from the "Old Guard", as we have all seen and benefitted from the Forks, so we don't hold one currency - aka Bitcoin/BTC.

crit
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Re: Cryptocurrency Exit Strategy

Post by crit » Fri Jan 05, 2018 2:34 pm

We did not buy our crypto, and thus have not yet been registered on any exchanges. As I said above, we are unable to register now. We will have to wait out this bubble and its volume. It would have been, well, nice, and we're very frustrated, and I think you can understand why I have to view it as all a big fiction (and console myself by checking our very vanilla portfolio and VTSAX).

But consider those effects as you are "trading" - it is not a real market. Don't be mistaken into expecting it to act like one.

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queso
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Re: Cryptocurrency Exit Strategy

Post by queso » Fri Jan 05, 2018 2:58 pm

crit wrote:
Fri Jan 05, 2018 2:34 pm
We did not buy our crypto, and thus have not yet been registered on any exchanges. As I said above, we are unable to register now. We will have to wait out this bubble and its volume. It would have been, well, nice, and we're very frustrated, and I think you can understand why I have to view it as all a big fiction (and console myself by checking our very vanilla portfolio and VTSAX).

But consider those effects as you are "trading" - it is not a real market. Don't be mistaken into expecting it to act like one.
Look on the bright side. You can always come back when we all lose our money and point your finger at us and laugh. You could always go out and buy a bunch of powerball tickets, quit your day job, buy a claim and head west to pan for gold or take a shot on the roulette wheel. Those are roughly in the same asset class as crypto. :happy

feh
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Re: Cryptocurrency Exit Strategy

Post by feh » Fri Jan 05, 2018 5:01 pm

celia wrote:
Thu Jan 04, 2018 2:43 pm
Valuethinker wrote:
Thu Jan 04, 2018 10:40 am
You could say "sell half when I have 2xed my money" for example.
I prefer something more like "sell 1/5 when I have 5xed my money".

Then repeat if it goes up 10 and 20 times your original cost.

This assumes this is what you hope will happen. :wink: :wink:
+1

Assuming the amount you put into XRP is a tiny portion ("play money") of your overall portfolio.

mws13
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Re: Cryptocurrency Exit Strategy

Post by mws13 » Fri Jan 05, 2018 8:58 pm

queso wrote:
Fri Jan 05, 2018 2:58 pm
You could always go out and buy a bunch of powerball tickets, quit your day job, buy a claim and head west to pan for gold or take a shot on the roulette wheel. Those are roughly in the same asset class as crypto. :happy
You are posting on an online forum about finances, but the one thing we can't do is exchange assets/$$$, or co-invest assets/$$$.

Now we have a technology where this forum could re-create the Vanguard 500 and not pay Vanguard their fee, and we can do it with complete trust (almost).

It's not Vegas, because you would be/would own "The House". I realize that this is a complex conversation, but Jack Bogel had complex conversations when he started Vanguard.

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